Sainsbury's basks in Jubilee sales success as it continues to outshine rival Tesco

Sainsbury's enjoyed strong demand for bunting and party food and
received two million more customer visits than usual in Jubilee week.

The
national celebrations lifted the supermarket's recent sales performance and will heap
more pressure on struggling market leader Tesco, which earlier this
week reported a fall in sales - although this didn't count its trading
during the Jubilee.

But Sainsbury's is likely to have benefited
more than rivals from the royal anniversary celebrations, as it was one
of the main sponsors of the Thames Diamond Jubilee Pageant and organised
its own Jubilee Family Festival in Hyde Park featuring Strictly Come
Dancing performances.

National celebrations: Sainsbury's sold decorations and party food to many of the revellers

The supermarket, which operates more than 1,000 stores, said it sold 550 miles of bunting, 670,000 Union Jack flags and more than 600,000 bottles of champagne and sparkling wine to customers marking the Queen's long reign.

It also enjoyed its best-ever weekly sales of strawberries, with more than two million punnets sold, 13 per cent greater than the previous record in Wimbledon week last year.

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Chief executive Justin King said: 'Customers continued the habit of savvy shopping to save money in order to be able to treat themselves on special occasions, shown by strong sales in the lead-up to the Jubilee celebrations.'

Sainsbury's recorded 24million customer transactions in Jubilee week - about two million more than normal.

This helped boost its underlying sales by 1.4 per cent in the 12 weeks to June 9, which was slower than the 2.6 per cent in the previous quarter but according to the grocer was still stronger than the rest of the market.

Tesco sales in the 13 weeks to 26 May - which did not include the Jubilee weekend - were 1.5 per cent lower than the same period last year, although the fall was less severe than the 1.6 per cent drop for the preceding quarter.

Sainsbury's has been one of the strongest performers in the supermarket price war, helped by its Brand Match scheme, which guarantees to match Asda and Tesco on 14,000 branded goods.

Today, it hailed another milestone with its biggest-ever week of clothing sales during the recent trading period, and said the fourth collection of womenswear designed by TV fashion guru Gok Wan was set to be the most successful to date.

Its Sainsbury's Local convenience store estate enjoyed 16 per cent growth after 21 new stores were opened over the quarter.

Improvements to its website allowing shoppers to order easily from mobile phones helped drive a 20 per cent rise in online sales.

Its own-label ranges have played a key part in recent strong performances and have underpinned its Live Well For Less advertising campaigns.

Sainsbury's is also three-quarters of the way through revamping its By Sainsbury's own-label range, which has included adding new products and improving existing ones.

Shares in Sainsbury's were down 2.4 per cent or 6.9p at 284.2p in early trading.

View from the City

'Sainsbury’s rise in sales was steady but shy of expectations, with the shares reflecting a tinge of disappointment in early trade,' said Richard Hunter, head of equities at broker Hargreaves Lansdown.

'The numbers were boosted by including the Jubilee weekend, unlike Tesco, and progress in clothing and online remained notably strong.

'In addition, the accompanying management comments were upbeat, particularly when bearing in mind the current squeeze on consumer incomes.'

Phil Dorrell, director of retail consultant Retail Remedy, said: 'These robust Sainsbury's numbers are in stark contrast to those issued by Tesco earlier in the week. The two stores are going in entirely different directions.

'Whereas Tesco has become a jack of all trades, Sainsbury's has single-mindedly focused on British consumers and their shopping experience. It has shown good old-fashioned retailing discipline and the results are evident.'

Stock trend: Sainsbury's shares have struggled to make headway over the past year despite its success against supermarket rivals